The Importance of Intellectual Property in Implementing Enforcement Programs

This is the fifth installment of a 7-part series providing comprehensive analysis of designing, implementing, and optimizing an intellectual property (IP) enforcement program that stops loss of market share and profits due to knockoffs, piracy, and other forms of IP infringement. This program stresses the importance of intellectual property rights in protecting market share. In this post, we discuss the implementing stage of the IP-enforcement program.

In the previous posts, we discussed quantifying the harm (monetary or otherwise) currently being suffered to establish a baseline against which the IP-enforcement program can be measured (Step 1), we marshaled all the IP assets and possibly registered new ones to be used in the program (Step 2), and finally, we prepared our initial design of the program based on the predefined “wins” and a series of thought-provoking questions. We are finally ready to implement the program starting with a few “test” cases.

Before we discuss how to implement the program, here’s a short summary of the entire series, which provides step-by-step guidance on developing and implementing an IP-enforcement program:

Step 1: Identifying and Quantifying Losses Caused by Knockoffs and Infringement

Step 2: Marshaling Intellectual Property Assets to Combat Knockoffs and Infringement

Step 3: Designing the IP-Enforcement Program to Increase Market Share by Stopping Knockoffs and Infringement

Step 4: Implementing the IP-Enforcement Program

Step 5: Optimizing the IP-Enforcement Program with Metrics

Step 6: Growing Future Market Share through Proactive IP Strategy

See our initial post, Importance of Intellectual Property Rights: Increasing Market Share Through Stopping Knockoffs and Infringements for a complete overview of the series.

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Starting the IP-Enforcement Program with “Test” Cases

Now that program is designed, we start with a few initial cases to gain information about infringer behavior and to test the various stages designed as well as the form documents. Based on the results of the initial runs, the stages and forms are finalized and the program begins in earnest. The staffing of the program based on roles with specific responsibilities should be assigned as the program progresses. The cost of the program should also be monitored to determine if economic goals will be met. These initial cases serve as a learning experience to confirm the decisions made in the design stage. For some programs, it takes dozens of actions to uncover improvements. For others, challenges emerge early such as with the language of the settlement agreement or issues with filing the first enforcement lawsuit.

Staffing the Program Effectively and Efficiently

IP-enforcement programs typically run linearly. For example, a program could have this simple of a flow: an initial investigation, commencement of engagement against the infringer, and ending the process with a settlement, lawsuit, UDRP (for domain names), or a letter setting up willful infringement. Because of their linear nature, IP-enforcement programs lend themselves to being systemized to increase resolution speed and efficiency. The outside law firm or company should have a system set up that manages these stages. Having done over 1,000 enforcement actions, we have found integrating an IP-enforcement program with a database, an operations manual, and a forms library to be especially effective measures.

Once the overall system is set up, the next challenge is assigning the right staff to the various responsibilities. Ideally, we want a detail-oriented person to manage the day-to-day operations, a lawyer that is people-oriented to engage with the infringers, and a third person that is the systems architect. All three personality-types are needed for a great system to work. One person should be designated as the day-to-day contact for the client.

Reducing Cost and Drag Through Software-Driven Metrics Meetings

Efficiency can be further increased with a software-solution as a single point of data shared by the team. Software can also be used to reduce the administrative burden of maintaining a multi-target campaign. Efficiency can also be achieved through well designed meeting pulses that quickly summarize the status of the program, the stage of each enforcement effort, and historical performance. Often these meetings can be short and are most effective when set for a standard schedule with time to address substantive issues that may arise.

Finalizing the Program Flow, Forms, and Best Practices

As discussed above, we have now run several “test” cases to evaluate our initial program design. Based on this feedback, we optimize the forms library, best practices or operations manual, the tracking software, and the status meeting pulse. In our experience, the tracking software typically gives clues to how the program is performing. Setting and sticking to a periodic set of meetings is essential to keeping everyone aligned with program status as we as generating ideas for improvement. We recommend having (i) quick monthly meetings that review the status of each action top to bottom, (ii) quarterly meetings to report on overall program performance, and (iii) annual meetings to establish future goals and areas of improvement.

Collecting Data to Optimize the Program and Report on Progress

We prefer to use a software solution that tracks not only data on program “wins,” but also milestones in the program. This additional data is very useful in the optimizing step discussed in the next post. For example, in a simple program that includes (i) an initial demand letter, (ii) a request for self audit and supplier information, (iii) a settlement agreement proposal, and (iv) a final settlement agreement that concludes the matter, each of these stages can be tracked. The average time between stages as well as the number of enforcement actions that succeed or fail by stage can provide useful information on potential improvements for program design. But this all starts with data, so discipline in this area is important.

The data generated through the IP-enforcement program implementation can also be used with monitoring services to identify infringers on an on-going basis. Once we develop a better understanding of how the bad actors carry out the infringement and/or monetize the counterfeiting activities, we can potentially identify additional bad actors that went previously unnoticed.

Maintaining a database of infringers and possible connections between various people associated with infringement can be useful in uncovering repeat infringers, potential conspiracies or coordination between different bad actors, and difficult or less than truthful outside counsel that have created a business out of defending counterfeiters.

Next Step – Optimizing the IP-Enforcement Program with Metrics

Now that program is designed and a few test cases have been competed, we are in position to begin tracking program data and reporting results. Based on this information and experience, we are ready for the next step, which is optimizing the program based on metrics. As discussed in our next post, this is an on-going commitment to continuously improve the program as well as to adjust for changing infringement strategies. Data, both quantitative and anecdotal, are valuable for this stage. See our post IP-Enforcement Programs: Optimizing the Program for a discussion of the next step in the process.

Access the E-Book “Increasing Market Share Through Stopping Knockoffs and Infringement”

We have condensed the six steps into a graphical E-Book that provides a summary of developing effective IP Enforcement Programs along with tips, techniques, frequently asked questions, and mistakes to avoid. You can access a complimentary copy of the E-Book by clicking here.

You may also be interested in the following posts on the importance of intellectual property in enforcement programs:

For more information about IP-enforcement and anti-counterfeiting programs, see our Anti-Counterfeiting and Luxury Brand pages. You can access additional information on our Brand Protection Strategies and Resources page.

About the Author

Through prosecuting over 1,000 intellectual property (IP) enforcement actions, Darin M. Klemchuk advises clients on proactive IP and an anti-counterfeiting programs to stop diverted sales, market place erosion, and other harms faced by businesses. You can learn more about Darin’s practice and view his curriculum vitae at his bio page. If you want to send Darin a message, then visit our contact page.

This post has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please consult your attorneys in connection with any fact-specific situation under federal law and the applicable state or local laws that may impose additional obligations on you and your company. © 2022 Klemchuk LLP

IP-Enforcement Programs: Implementing the Program